WASHINGTON (7/17/14)--The Consumer Financial Protection Bureau is seeking public comment on a plan to expand its complaint database to include consumer narratives. The additional information would describe in detail the problem a consumer had with a financial product, service or company, the unsuccessful steps taken to date to find resolution, the service providers' actions and the impact to the consumer.
The plan is intended to have three major benefits to consumers, as well as foster quality products and services in the financial marketplace.
As Director Richard Cordray says in remarks prepared for today's CFPB consumer response field hearing in El Paso, Texas, the bureau has handled approximately 400,000 consumer complaints in its three-year history. He said that publishing the narratives would enrich the information available in the complaint database so consumers, consumer groups and companies are better able to spot trends and problems. Reviewers would be able to see patterns of abuse and identify issues that may not have been uncovered before.
It would also, he said, provide important context that better explains the significance of the consumer's complaint--beyond the current high-level category buckets, such as "transaction issue" or "advertising and marketing." Cordray said, "The narrative supplies vital information about why the consumer believes they were harmed, and how the problem has affected the consumer's life."
Ultimately, the CFPB director said, the expanded information would help consumers and consumer groups make informed financial decisions. "Consumers often go online to do their homework before deciding what to buy, and including the details of a complaint would help inform them as they are considering a particular product or service." Reviewers could use the narrative to decide for themselves, he said, if the problems experienced by other consumers would stop them from purchasing the same product or service.
Cordray said the CFPB also believes the narratives could spark a consumer-satisfaction competition among financial services providers and encourage companies to improve the overall quality of their goods and services to more vigorously compete over good consumer service.
He said the increased disclosure plan has the potential to improve the "functioning, transparency, and efficiency of the market."
The bureau is accepting public comment for 30 days after the proposal is published in the Federal Register.
The Credit Union National Association has worked with the CFPB to address credit union concerns regarding the complaint database.
While underscoring with the bureau that credit unions are not likely be the subject of a sizable number of consumer complaints, CUNA also has warned that sensitive or confidential business or consumer information could be inadvertently disclosed when consumer complaints are filed in the database and has urged the bureau to minimize privacy risks and other unintended consequences.